Risk Management Services

Our Services

Risk Management Services

We understand the importance of having in place robust risk management techniques and procedures. That is why we entrusted our risk team in the hands of experts in the asset management field. Our risk management team offers independent and high-quality day to day risk management services by assisting across both qualitative and quantitative risk management requirements.

Having dedicated senior management with hands-on experience in the field, we strive to stand out from our competitors by providing high quality, value for money risk management services. With the aim of delivering an incomparable quality of service and reporting, ZASMalta has affiliated with an award winning key global service provider having extended expertise in the provision of risk management solutions and risk management model construction. Risk solutions and reporting are catered and personalised to meet the profile and needs of individual clients, further ensuring constant alignment with regulatory requirements.

“If you don’t invest in risk management, it doesn’t matter what business you’re in, it’s a risky business.”

 

~ Gary Cohn

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Risk Manager Appointment

 

Through the years, the importance of the presence of a reputable Risk Manager has continued to gain substantial recognition by both local and international regulators. We acknowledge that hands-on experience in the asset management space is an essential component of a strong Risk Manager.

ZASMalta can provide an MFSA approved Risk Manager with vast asset management experience to cater for all risk management needs of AIFs, UCITS Management Companies, AIFMs, UCITS, and MiFID firms.The Risk Manager shall set-up the risk management function and create a risk management framework and governance culture within the organization.

Our risk management team offers independent day to day risk management services by assisting across both qualitative and quantitative risk management requirements.

Our general range of risk management services include:

  • Implementation of a risk management framework in line with the applicable Rules;
  • Drafting of detailed risk manager compliance reports highlighting identified risks;
  • Detailed risk manager monitoring including investment compliance monitoring and fund valuation oversight (where relevant);
  • Calculation and provision of risk management metrics;
  • Construction of risk management models;
  • Building of qualitative risk management strategies and policies; and
  • Liquidity Stress Testing solutions in line with the ESMA Guidelines.
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Risk Consultancy, support and training

 

ZASMalta can work with you to ensure that you have in place robust risk management procedures and controls, further assisting on any additional risk management support you may need. We cater also for clients which are not seeking to appoint a Risk Manager but rather require risk related consultancy, support and training. Such services are offered on a one-on-one basis and are tailor-made to client requirements.

ZASMalta is able to offer:

  • Quantitative risk management guidance including detailed risk manager monitoring;
  • Qualitative risk management guidance including policy and procedure drafting assistance;
  • KIID/KID drafting assistance (on risk management related sections)
  • VAR modelling and back testing;
  • Liquidity Stress testing; and
  • Assistance in the preparation for regulatory risk responses, assessments, or visits.
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Liquidity Stress Testing

Following the European Systemic Risk Board recommendations, ESMA published the Final Report “Guidelines on liquidity stress testing in UCITS and AIFs” in September 2019 subsequent to a public consultation. Such Guidelines apply to UCITS, AIFs (bar non-leveraged closed ended AIFs), ETFs, and Money Market Funds. Asset managers are required to apply these Guidelines, in addition to the existing liquidity stress testing requirements as set out in the UCITS and AIFMD regulatory frameworks, by September 30th, 2020.

The Guidelines require for Investment Managers to build liquidity stress testing models to determine the liquidity risk arising from both the asset and liabilities side of every fund’s balance sheet and further assess the overall liquidity risk of the fund. ESMA highlights that the liquidity of assets shall not solely consider time and cost elements but shall further consider consistency with the fund investment policy, investor obligations, and the overall risk profile.

The frequency of Liquidity Stress Testing and the scenarios to be stressed are required to be fully aligned with the profile of each fund, with stress testing recommended to be done at least quarterly.

The Guidelines outline detailed requirements to be incorporated in a Liquidity Stress Testing Policy including an outline of the assumptions underpinning the models utilised, model validation, scenario selection justification, liquidation methodologies, and escalation procedures.

Scenarios are required to be both historical and hypothetical with reverse stress testing being applied where relevant. The Guidelines go further in requiring managers to incorporate risk scoring into their liquidity stress testing to enhance the view of liquidity across funds under their management.

ZASMalta has partnered with an award-winning Risk Management platform provider, Clarus Risk, to offer a holistic Solution to assist Asset Managers in complying with the requirements of Liquidity Stress Testing Guidelines from both a risk management and reporting perspective. The Solution caters for:

  • Consultancy for the development of a liquidity stress testing policy;
  • Liquidity stress testing models;
  • Scheduled customisable liquidity stress-testing reports in a board friendly format;
  • Prompting of internal liquidity requirement inconsistency;
  • Shareholder & subscription / redemption analytics including pre and post redemption analyses; and
  • Continuous co-operation and support.
LIQUIDITY STRESS TESTING SERIES

CSP Risk Officer Appointment or Support

 

The recently updated Corporate Service Providers (CSP) Rulebook has shed light on the importance of risk management and has introduced additional risk management requirements. ZASMalta offers Risk Officer appointment service or support to assist in meeting all requirements as imposed by the applicable local framework.

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Risk Management “Health Checks”

 

 

The industry has seen increased regulatory attention on ensuring adequate risk frameworks within investment companies. With this in mind, ZASMalta offers Risk Management Health Checks which involve reviews on the risk management framework of a company including among others:

  • Review of risk management policies and procedures
  • Review of risk management reporting
  • Review of risk management oversight
  • Review of risk management systems
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    If you think compliance is expensive -
    try non-compliance

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